China, Audi and commercial vehicles the focus in widespread VW Group restructure

THE Volkswagen Group has announced an “extensive structural and management realignment” for its global operations that places greater emphasis on China, its Audi luxury brand and commercial vehicles.

Aiming to become the world’s number one motor company within six years, the European auto giant has created a new boardroom-level management position specifically for Volkswagen’s biggest market, China, which will now be led by VW’s heavy transport vehicles chief Jochem Heizmann.

The company has also made significant moves at its fast-growing and highly profitable Audi brand, with Bentley and Bugatti boss Wolfgang Duerheimer becoming head of technical development, and VW marketing chief Luca de Meo taking charge of Audi’s global sales and marketing.

Volkswagen’s head of new product start-ups in the purchasing division, Bernd Martens, will become Audi’s top purchasing executive.

Mr Duerheimer will be succeeded as head of Bentley Motors and Bugatti by VW commercial vehicles chief Wolfgang Schreiber, while Audi’s outgoing technical chief Michael Dick is now preparing to retire, aged only 60.

Mr de Meo, who before joining VW in 2009 rose quickly through the ranks of the Fiat Group to become global marketing chief and Alfa Romeo CEO, replaces Audi’s sales and marketing boss Peter Schwarzenbauer, a former Porsche Cars North America chief executive who is reportedly now planning to leave the VW Group.

At the Volkswagen brand, Mr de Meo is being replaced by Juergen Stackmann, who has been responsible for sales and marketing at VW’s Czech brand Skoda for the past two years and is a former senior executive for Ford in Europe.

Dr Heizmann’s new role as head of China has left Volkswagen to find a new role for Karl-Thomas Neumann, who has led VW’s China operations since September 2010.

He was previously the VW Group’s chief officer for electric traction, having joined VW from Continental AG three years ago in a high-profile move in which he was touted as a possible successor for VW Group CEO Martin Winterkorn.

Dr Heizmann’s new role as head of China comes as Volkswagen restructures its commercial vehicles operations, fully integrating VW’s CV unit with its Scania and MAN truck brands under current Scania president and CEO Leif Ostling, who will also now join the Volkswagen Group board.

A string of associated high-level appointments accompany the commercial vehicle restructure, one of which is the move of Skoda technical development chief Eckhard Scholz to a similar role for VW commercial vehicles.

Skoda’s incoming technical chief is Frank Welsch, currently head of bodywork development at the Volkswagen brand.

The management changes, most of which come into effect on September 1, are designed to give Volkswagen “extra momentum” with its ‘Strategy 2018’ corporate plan, which calls for more than 10 million annual sales by 2018 – an achievement that could see it overtake General Motors and Toyota to become the automotive world’s number one.

“Our company has grown strongly and become more international in recent years,” said Dr Winterkorn.

“This fundamental reorganisation is the right response to the increasing challenges.

“At the same time we are laying the foundations for keeping the group and its brands on their successful course even in a difficult market environment.”

Volkswagen Group sold a record 8.27 million vehicles in 2011 – 15 per cent more than in 2010 – thanks partly to expanded production of SUVs such as the VW Tiguan and Audi Q5 to meet demand in the US and China. Some 2.3 million sales were achieved in China alone.

VW’s net profit also more than doubled last year to €15.4 billion ($A19.6b), in part due to gains in the valuation of VW’s share options on the highly profitable Porsche brand.

With chairman Rupert Stadler at the helm of Audi, Volkswagen’s luxury brand also posted a profit of €4.4 billion ($A5.6b) for 2011 as sales rose 19 per cent worldwide to a new record of 1.3 million units.

Despite ongoing economic uncertainty in Europe, Volkswagen will launch 40 all-new or upgraded models across the group in 2012 and in the first quarter the company recorded a sales increase of 8.6 per cent – to a record 2.89 million vehicles.

“Our clear goal is to continue our successful course of recent years with great momentum and stability,” said Dr Winterkorn.

“I am convinced that now, more than ever, the Volkswagen Group has the right people in the right positions to make our Strategy 2018 a success.”

He added that the company’s multi-brand strategy was the foundation of its ongoing financial success.

“All brands have a high degree of operational autonomy and responsibility. At the same time, we are now further intensifying knowledge transfer and management links within the group,” he said.

“That is how we can leverage synergies and consistently harness growth opportunities – to the benefit of each individual brand and the group as a whole.” On Mr Schreiber’s appointment to the key post of Bentley Motors chairman and CEO, Dr Winterkorn said the experienced engineer had the right credentials and experience, including development of transmission and drivetrain components for the Continental GT and Arnage during his time as head of transmission/drivetrain development at the Volkswagen brand in the mid-1990s.

He is also a former managing director of Bugatti and, prior to that, technical director of Bugatti Engineering.

“Dr Schreiber and Mr Duerheimer have one important thing in common: they are both thoroughbred engineers and represent the technical expertise of Volkswagen Group,” said Dr Winterkorn.

“This is why I am absolutely certain that Dr Schreiber is the right man to continue the successful strategy at Bentley.”